May 3, 2010 -Drug manufacturer Bristol-Myers Squibb (BMS) has begun sending payments to 340B covered entities for overcharges that resulted from the manufacturer’s miscalculations of average manufacturer price (AMP) and best price. Hospitals report receiving a wide range of amounts, from less than $70 in one case to slightly more than $85,000 in another.
BMS says the miscalculations occurred in determining Medicaid rebates and 340B discounts for more than six dozen BMS products and the antidepressant Serzone. The manufacturer says only best price was miscalculated for the antidepressant, but that both AMP and best price were miscalculated for the other products.
The payments cover the period 1998 through the first quarter of 2001 for Serzone and the third quarter of 2002 through the second quarter of 2005 for the other drugs. In calculating the payments, BMS has offset the refund with any undercharges that it believes also resulted from the miscalculated AMPs and best prices.
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents hospitals participating in the 340B program, says it is concerned that the offset for undercharges violates a long-standing government policy that manufacturer undercharging constitutes the establishment sub-ceiling pricing, and cannot result in manufacturer recoupment against covered entities. For this reason, SNHPA says it will be formally protesting BMS’s aggregated approach to calculating overcharges in a letter to the Office of Pharmacy Affairs (OPA).